Friday preview: Wetherspoon expected to reveal first half earnings decline

10th Mar 2016 12:21

(ShareCast News) - JD Wetherspoon is expected to report a decrease in first half earnings on Thursday as margins decline due to higher salaries.Deutsche Bank (DB) sees earnings before interest, tax, depreciation and amortisation falling 9.1% to £50m and margins dropping 1.1 percentage points to 6.3%. Pre-tax profit in the first half is estimated to fall 11% to £3m year-on-year."The margins are hit due to 14% increase hourly paid staff costs and 13% increase in salaried staff costs," DB said.The company also faces a hit from the new National Minimum Wage which comes into effect in April. The minimum wage will rise to £7.20 per hour in April for workers over 25 and increase to £9 by 2020.Wetherspoon founder Tim Martin last September warned that National Living Wage in the UK risks further pub closures, especially in less-affluent areas where rent inflation continues to rise.In the company's second quarter trading update in January, Martin said: "Like-for-like sales have improved in the second quarter so far. However, as indicated in our November trading update, increased labour costs will be an important factor in the outcome for this financial year. Our current view is profits for this year are likely to be towards the lower end of analysts' expectations."Friday 11 March INTERIMS Wetherspoon (J.D.) INTERIM DIVIDEND PAYMENT DATE City of London Investment Group, Conviviality, Foresight VCT Infrastructure Shares QUARTERLY PAYMENT DATE Carnival FINALS Computacenter, Old Mutual, Taylor Wimpey ANNUAL REPORT Heavitree Brewery, Herald Inv Trust, Johnson Service Group SPECIAL DIVIDEND PAYMENT DATE Impax Asset Management Group, JPMorgan Russian Securities AGMS Hyundai Motor Company GDR (Reg S) TRADING ANNOUNCEMENTS SThree FINAL DIVIDEND PAYMENT DATE Brewin Dolphin Holdings, Impax Asset Management Group, JPMorgan Russian Securities, Zytronic